Supply chain management has never been more important
Businesses should have environmental credentials at front of mind when beginning to build supplier relationships, seeking to link with companies that are open to new dialogues as to how sustainability can be enhanced across the value chain.
Little over a week ago, World Environment Day, run by the United Nations each year to encourage global awareness of the need to protect the environment, put the spotlight on current environmental practices in the private sector.
With an ever-growing number of consumers favouring companies that demonstrate a commitment to adopting an eco-friendly approach, businesses that take steps to reduce their environmental impact stand to gain significant reputational benefits.
Procurement and logistics operations often contribute significantly to a company’s environmental impact and businesses that make it a priority to ‘green up’ their supply chain can quickly improve their overall environmental credentials. From a more commercial perspective, sustainable supply chains can also have a positive effect on the bottom line – offering efficiency gains which ultimately result in increased revenue.
While it is down to procurement professionals to formulate a strategy for increasing supply chain sustainability, its successful implementation is dependent on the cooperation of suppliers. For this reason, businesses should have eco-friendly credentials at front of mind when beginning to build supplier relationships.
Actively seeking out companies which offer sustainable product choices and demonstrate a forward-thinking approach to deliveries offers supply chain managers a head-start in achieving their environmentally-friendly targets. These suppliers are also far more likely to be open to suggestions with regards to implementing green procurement practices. Sourcing products and services locally as best as possible also has the effect of minimising the number of miles an item travels to the end customer, reducing harmful carbon emissions whilst driving valuable cost savings.
As well as assessing how goods are procured, buyers can also minimise their carbon footprint by giving careful thought to the number of suppliers used and looking, wherever possible, for opportunities to streamline the supply chain. By opting for vendors offering multiple products, businesses can cut down on the number of deliveries needed, as well as their associated shipping costs.
Choosing suppliers with the correct capacity and approach needed for an organisation to engage effectively with the green agenda is critical. However, this must be combined with a thorough audit and monitoring process if a business is to ensure compliance and react promptly to any potential risks. Once an overall sustainability strategy and objectives have been adopted, supply chain managers should ensure progress can be measured over time by setting KPIs. By aligning these with the findings of a comprehensive supply chain audit, weaknesses can be promptly identified with appropriate controls implemented to improve overall environmental impact.
Efforts to reduce the carbon footprint of procurement and logistics activities should also consider the importance of building strong supplier relationships, with valued partners likely to be far more willing to help businesses achieve eco-friendly objectives. As well as maintaining constant communication with key suppliers, companies should not be afraid of challenging vendors about their current approach and asking them to seek an alternative. However, while it may be necessary to impose penalties on suppliers who fail to comply with sustainability targets, it is also worth bearing in mind that incentives can provide an effective source of motivation for suppliers to maintain service levels.
Sustainability is an increasingly important issue on the corporate agenda, and the UK Government’s recent publication of its draft Air Quality Plan was a powerful reminder of the responsibility individual businesses have to protect the environment for future generations. By choosing a small number of carefully-selected suppliers, nurturing relationships with vendors and monitoring procurement activities closely, organisations can gain a reputation for sustainability which sets them apart from competitors whilst reaping the rewards of increased efficiency.
Nigel Crunden is a business specialist at business solutions provider Office Depot.